Sonoma County politicians wary of push to overhaul pensions

Several Sonoma County politicians who rely on labor union support are coming out early against a proposed statewide ballot measure that could dramatically overhaul public employee pensions.

The Pension Reform Act of 2014 would change California's constitution to allow for reductions in public employee benefits for current workers. Employees would keep benefits earned prior to changes in their contract but could be affected by reduced benefits going forward.

The measure would appear to contradict case law that appears to make such changes illegal without giving public employees another form of compensation to offset that loss. It also is sure to face stiff resistance from labor groups, which criticize the proposal as an end-around collective bargaining.

"The proposed measure is a huge threat to bargaining and the power of labor, a core Democratic constituency and one that will fight this tooth and nail," said David McCuan, a political scientist at Sonoma State University.

San Jose Mayor Chuck Reed is spearheading the pension changes, which have sparked criticism in Sonoma County among elected officials whose own political fortunes rest to varying degrees on labor support.

Sonoma County Supervisor Mike McGuire, a candidate for state senate, Healdsburg Vice-Mayor Jim Wood, a candidate for state assembly, Santa Rosa councilwoman Erin Carlstrom, who is considering entering the race for a state assembly seat, and Santa Rosa Mayor Scott Bartley signed a Nov. 26 letter to Reed in which they urged him to withdraw the ballot measure. An additional 21 elected officials from across California signed the letter.

The letter stated that pension matters are "best decided locally and addressed at the bargaining table rather than at the ballot box," and warned Reed that his measure "will likely increase costs to California's cities by hundreds of millions of dollars."

Wood, who was just appointed Healdsburg's mayor and is running for state Assembly in the 2nd District, said the ballot measure would be "extremely confusing" for voters and lead to a costly battle between rival campaigns.

Wood this week announced that the California School Employees Association is supporting his Assembly campaign. But he said labor support did not play a role in his decision to oppose Reed's efforts.

"At the end of the day, I think the better solution is to allow local jurisdictions to solve these issues," Wood said. "When I see language in an initiative that is as long and detailed as this, I get concerned."

Fiscal watchdogs, however, warn of another financial crisis if steps are not taken to rein in rising pension costs.

In Sonoma County, a 49 percent spike in unfunded pension promises could drive up taxpayer contributions to government agencies by $13.6 million over the next three years, according to a May report.

The report showed a sharp, one-year jump in long-term unfunded obligations to county retirees. Now at $527 million, that so-called unfunded liability — the difference between current assets and projected payments to retirees — is up from the $353 million reported last year.

The Sonoma County Employees' Retirement Association covers six government agencies, of which the county by far is the largest. It pays benefits to 4,283 retirees and has about 4,150 current and deferred workers enrolled.

"Right now the rules are holding solutions hostage," said Santa Rosa winemaker Ken Churchill, a pension system critic. He said Reed's measure would "take off the handcuffs" while protecting pensions already earned.

Reed, in his response to the letter's authors on Dec. 3, stated that nothing in his measure would limit local officials from addressing retirement problems nor dictate specific changes to benefit plans. He wrote that any such changes would have to comply with collective bargaining laws.

"Continuing to ignore these enormous problems is not fair to the people who rely on us for essential public services, and it is not fair to those who are counting on us for their retirement security," Reed wrote.

The city of Santa Rosa's pension costs are set to soar by about $12 million over the next six years as it is forced to pay higher rates set by a state pension system trying to come to grips with a massive gap between its assets and what it owes current and future retirees.

The increases of about $2 million per year would result in the city by 2020 paying about 45 percent more than it does now toward employee pension costs, already one of the largest costs in the city budget, according to an August report.

But Bartley, the city's mayor, called Reed's measure "potentially very Draconian" and counter-productive to what he views as progress being made locally with public employee unions.

"We have accomplished a lot working with our labor units in terms of changing pensions," Bartley said. "My feeling is that it's not the time to draw a line in the sand on this, which I think the initiative would do."

Reed submitted his ballot measure to the California Attorney General's Office. Supporters would have 150 days once the title and summary are prepared to circulate petitions and collect signatures. They would need at least 807,615 valid voter signatures, representing 8 percent of the votes cast in last election for governor, to put the measure before voters.